Council here has agreed to engage a Toronto firm to conduct a tax recovery audit in an attempt to find savings in the amount owed by the municipality to Canada Revenue Agency (CRA).
At the Nov. 12 meeting, finance director Yufang Du explained that as a result of a CRA tax (GST/HST) audit for the period from Jan. 1, 2010 to Dec. 31, 2012 the municipality is required to pay $10,916 to the CRA.
“It appears as though we really haven’t been doing things too good on the HST, if we owe $11,000,” commented councillor Mike Downey.
Du noted the township is still awaiting a final report from the CRA to confirm the amount.
At council’s direction, staff contacted three tax consultants to discuss opportunities for tax recovery. Du reported proposals were received from two companies, Fairtax and Collins Barrow.
Du stated both Collins Barrow and Fairtax provided good references and both had found savings for other municipalities in the past. She noted Fairtax is a relatively young and fast-growing company specializing in tax recovery, while Collins Barrow is a reputable and large company which provides wide range of accounting and financial services.
Smaller company preferred
“In my opinion I’d like to deal with a smaller company that specializes in tax recovery,” said Du, indicating her preference that council engage Fairtax.
Both companies, she noted were Toronto based. Although Collins Barrow does have an office in Elora, she said the municipality would be dealing with personnel from Toronto on a job of this nature.
“Personally, I have an issue if we’re not going with Collins Barrow, because we wouldn’t even be discussing this if it wasn’t for them,” stated Downey, who noted the company also supports the municipality through arena board advertising.
Fairtax’s proposal indicted the company would charge 35 per cent of the first $150,000 recovered and 25% per cent of all remaining amounts recovered, while Collins Barrow’s would charge 35% of all amounts recovered.
Both companies indicated there would be no charge if they were unable to recover money for the township.
Members of council noted it was unlikely the discount for recovery of over $150,000 would come into play.
Both companies indicated the scope of the audit would include federal and provincial tax, government grants and payments, overpayment to third parties and overpayment of customs duties during last four years.
Council approved a resolution, moved by councillor Neil Driscoll and seconded by councillor Andy Knetsch, to engage Fairtax to conduct the audit.
